Is Canada getting value for money when it comes to awarding contracts to private firms? After resoundingly concluding the ineptitude and indolence of numerous departments, federal agencies and crown corporations, the Auditor General of Canada’s analysis of the consulting firm McKinsey & Company suggests otherwise. The use of resources is not in the least optimal, and Canada is ignoring its own rules for awarding contracts.
The report released last week by Auditor Karen Hogan is worrying. In a federal government universe where the public service continues to grow, citizens have the right to wonder why they pay without counting twice rather than once: to the private and to the public! If federal ministries and bodies need to use the professional services of private companies to support them in the management of their resources, the rules of good governance require that the need be clearly established, that the rules for awarding contracts are respected and that the money is spent for the intended purposes.
After examining the contractual ties between the American firm McKinsey & Company and the federal government, Karen Hogan concludes that there are frequent violations of these basic rules. Worse: nothing allows him to conclude that this non-compliance with policies is not generalized to all contracts. McKinsey, with its $209 million in contracts awarded between 2011 and 2023, after all only accounts for 0.27% of the entire pie of sums paid to all service providers. So this would only be the tip of the iceberg.
This shocking report shines a spotlight on the indolence of corporations and federal departments, which sometimes literally organized the rules of the game so that they suited only McKinsey. The necessary justifications to support calls for tenders were not always present. The evaluations aimed at convincing the choice of McKinsey were not always convincing. Policies for awarding professional services were not always respected.
The auditor only issued one recommendation at the end of the report, and it concerns conflicts of interest. But it directs the organizations concerned to implement the suggestions made by other internal reviews, including those of the Office of the Comptroller General of Canada, five of the ten crown corporations and the Office of the Procurement Ombudsman. If the word indolence often comes up to describe the actions of the federal government in matters of public finance management, it is because it seems neither to respect its own rules in this area nor to comply with the demands placed on it. The reports that noted it pile up, nothing changes.
McKinsey has attracted a lot of interest, as use of its services has grown significantly under the reign of Justin Trudeau. The former boss of the firm, Dominic Barton, had to establish his lack of privileged links with the Prime Minister. As the Treasury Board had concluded before her, the auditor did not detect political interference in the McKinsey file.
Added to the nonchalance of the federal government in its management of private contracts is the fact that 110,000 civil servants have been added to the workforce of federal departments and agencies since Justin Trudeau came to power in 2015. This involves an increase of 42%, according to Treasury Board data published by The Press at the beginning of May. When questioned, the Parliamentary Budget Officer expressed his astonishment at “the continued and sustained increase in the size of the public service” and the increase in personnel expenditure. At the same time, the use of professional and special services has exploded, reaching “a record level of $21.6 billion,” he notes in the Supplementary Estimates 2023-2024. Both prize pools swell. However, effective services to citizens and the productivity of the federal government do not make the headlines.
Are we getting value for our money? If the answer were yes, there would be no fiascos called We Charity and ArriveCAN or federal administrative failures constantly reported by the media and placing citizens in unacceptable positions, despite the proliferation of federal employees who are supposed to essential services. Expense does not guarantee effectiveness. Auditor Karen Hogan’s audit provides enough material for Justin Trudeau’s Liberals to review their internal management practices and comply with their own policies. Good management of public finances seems to bore this government to the point that it is flouting the rules, but voters have the right to expect optimized use of the public funds to which they contribute.